Oil edged lower after a report showed U.S. gasoline supplies increased for the first time in nine weeks even as crude stockpiles dropped.
Gasoline inventories rose 1.54 million barrels last week, surprising analysts surveyed by Bloomberg who projected the Energy Information Administration data would show a 2-million-barrel decline. Crude inventories fell 1.03 million barrels to 532.3 million last week, the agency reported Wednesday. Crude production and refinery operations rose in the week ended April 14.
Oil had rallied above $53 a barrel after some members of the Organization of Petroleum Exporting Countries voiced support for prolonging cuts past June, but rising U.S. output is undermining the effort to trim a global glut. Production from major shale plays in May is forecast to climb to the highest level since 2015, according to the EIA.
“The only negative number in the report is the gasoline build,” Phil Flynn, senior market analyst at Price Futures Group in Chicago, said by telephone. “There’s a lack of passion in the move. I think the market needs to start to see bigger crude-oil inventory declines before it starts to rise some more.”
West Texas Intermediate for May delivery slipped 41 cents to $52 a barrel at 11:30 a.m. on the New York Mercantile Exchange. Brent for June settlement fell 45 cents to $54.44 a barrel on the London-based ICE Futures Europe exchange.
“We should see an accelerating level of crude draws, something we’ve been waiting for a while,” Cavan Yie, senior equity analyst at Manulife Asset Management Ltd. in Toronto, said by telephone. “The reasons are twofold. Refinery maintenance is finishing, which is leading to greater processing of crude, and the OPEC cuts are going to finally have an impact on U.S. inventories.”